Google's massive €2.4bn fine: Tech giant braced for further penalties

Google Opens New Berlin Office
Google may appeal the ruling (Source: Getty)

Google is braced for further penalties from two other Brussels probes following the European Commission's record €2.4bn (£2.1bn) fine, slapped on the firm yesterday.

The Alphabet-owned tech giant was fined by the competition commissioner Margrethe Vestager for promoting its own shopping comparison service at the top of search results.

The mammoth anti-trust fine, a record for the EC, was the result of a seven-year investigation.

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Google abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of competitors,” Vestager said. “What Google has done is illegal under EU antitrust rules.”

Google’s senior vice president and general counsel Kent Walker said: “We respectfully disagree with the conclusions." He revealed the company was considering an appeal.

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Yesterday’s Google Shopping fine has been seen as a sign that Vestager and the commission are willing to play tough with the tech goliath. Lawyers and analysts believe the Google Shopping fine could be dwarfed if the EU decides to slap the US firm with more penalties.

Oliver Fairhurst of law firm Lewis Silkin told City A.M.: “I think it does show a willingness to take Google on, not that the commission has been afraid to do so in the past.

“The tone of the commission’s press release suggests that it is very keen to keep pressing Google, rightly or wrongly.”

In April last year, the commission launched a formal probe into the company’s Android mobile phone software, including the way it bundles together apps. Edison Investment Research analyst Richard Windsor speculated that this could result in a fine of $6bn (£4.7bn), while Signature Litigation’s Adam Rooney also suggested this would “probably exceed” the Google Shopping fine.

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The commission filed a third antitrust charge against Google last July, with the probe focusing on its AdSense business and whether the company blocks out rivals in online search advertising.

Aleksi Aaltonen, of Warwick Business School, said: “Given the current geopolitical environment, I would not be surprised if the EU would take an increasingly strict approach against seemingly unfair business practices of the US-based tech superpowers.

“Google will have to adapt its business practices, but I am not sure if that matters to the original issue anymore. More important is that the company is being tamed by a tightening web of regulations it has to learn to observe.”

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It was also suggested yesterday that the EU’s approach could lead to headaches for Google in other jurisdictions. Rooney, of Signature Litigation, suggested Vestager could “inspire regulators in South Korea, India and other parts of the world to find against Google in the same way”.

Meanwhile, in the US, the fine was welcomed by the news media industry, including Rupert Murdoch’s News Corp.

The company said in a statement: “Other regulators and companies have been intimidated by Google’s overwhelming might, but the commission has taken a strong stand and we hope that this is the first step in remedying Google’s shameless abuse of its dominance in search.”

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